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Strengthening the Commonwealth Performance Framework

Stein HelgebyDeputy Secretary

Governance and Resource Management Department of Finance

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Enhanced Performance Framework Overview

1) Public Governance, Performance and Accountability Act1. Update2. Next Steps

2) Performance FrameworkFrom the perspectives of:

1. Managers 2. Scrutiny 3. System Design

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The PGPA Act

• PGPA Act is the cornerstone reform of the Public Management Reform Agenda (PMRA)

• But it isn’t the end….

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After 1 July 2014

2010 to 2012 2013 2014 2015

29 June 2013PGPA Act passed

July 2013 to July 2014Preparing for PGPA Act

• Rules developed• Consequential

amendments prepared• Guidance prepared• Training delivered• JCPAA

After 1 July 2014 Phase 1 – Implementation of PGPA ActPhases 2 & 3 – Further reforms:

• Improved performance, planning, monitoring and reporting

• Tiered reporting and earned autonomy

• Joining-up with others

1 July 2014PGPA Act commences

1 July 2015Corporate plans required

2010 to 2012Consultation:

• Issues Papers• Discussion Paper• Position Paper• JCPAA

After the PGPA Act commences the next stage in the PMRA

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PGPA Act

• Commenced on 1 July

• Replaced the FMA Act and CAC Act

• Lines up Commonwealth entities under a common resource management framework that enables us to:

adopt a risked based approach to management

optimise planning and performance

seek opportunities to work better together

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Objectives of the PGPA Act• Government should operate as a coherent whole

• A uniform set of duties applies to all resources handled by Commonwealth entities

• Performance of the public sector is more than financial

• Engaging with risk is a necessary step in improving performance

• The resource management framework should support the legitimate requirements of the Government and the Parliament in discharging their respective responsibilities.

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Uniform duties for accountable authorities

One set of general duties for all accountable authorities to:

• govern the entity: s15 proper use and management of public resources achievement of the purposes of the entity financial sustainability of the entity

• establish systems for risk and control: s16

• encourage partnering: ss17-18

• keep responsible minister & Finance Minister informed: s19

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Uniform duties established for officials

General duties on all officials to promote high standards of governance, performance and accountability, include:

• a duty of care and diligence: s25

• a duty to act in good faith and for proper purpose: s26

• a duty not to misuse position or information: ss27 & 28

• a duty to disclose interests: s29

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Next Steps in Performance Management Reform Agenda (PMRA)

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Stage 1: Planning

Stage 2: Resource Allocation

Stage 3: Implement & Monitor

Stage 4: Evaluate &

Audit

Stage 5: Report

PGPA Act better reflects resource management cycle:

Focus on helping entities to operate better and improve accountability

From 1 July

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Phase 2: Focus on planning and performance

• Universal corporate planning for 2015-16: s35

linked to key Government’s priorities & objectives: s34

relationship to Portfolio Budget Statements & budget process

• Framework for measuring and assessing performance: s37-40

monitoring and evaluation

meaningful performance information (financial and non-financial)

annual performance statement

From 1 July

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Phase 2: Focus on reporting

Greater emphasis on accountability and transparency

• Better information to Parliament, the public and the centre

• Clear line of sight from Corporate plans and Portfolio Budget Statements to Annual reports

• More information on the web

From 1 July

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Phase 3 – focus on cooperation and partnering

• Duty to encourage cooperation with others: s17

• Duty to consider requirements imposed on others: s18

• New bodies corporate to be established by rules: s87 Joint ventures

• Sharing information: s82

• Cross-jurisdictional auditing: s83

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Strengthening the Performance Framework– Early Ideas

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‘Enhanced Commonwealth Performance Framework – Discussion Paper’

• Finance is releasing a Discussion Paper on non-financial performance.

• We will consult widely

• The paper proposes options and questions

• Focuses on the new requirements (Corporate Plan and Annual Performance Statement) and how they will interact with the current mechanisms PBS and Annual Report

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Existing requirements

Actual PerformanceAnnual Report•Reports results against the PBS

Planned PerformancePortfolio Budget Statement (PBS)•Outlines Government’s planned activities and resources sought

1. Managers

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Enhanced legislative requirements

Planned PerformancePortfolio Budget Statement (PBS)•Outlines Government’s planned activities and resources sought

Corporate Plan (new)•Central repository of information regarding corporate governance, human resources and financial management.

Actual PerformanceAnnual Report (including new Annual Performance Statement)•Reports results against both the PBS and Corporate Plan

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Improving Portfolio Budget Statements (PBS)

Potential improvements to KPI arrangements to include other measurement tools:

• Strengthen and improved guidance of KPIs

• Complemented by the flexibility to use a range of different performance measurement tools other than KPIs

Potential to reduce the volume of reporting in Portfolio Budget Statements by rationalising information that is duplicated in the budget papers

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Corporate Plan – requirements

• The PGPA Act now requires all Commonwealth entities to have a corporate plan

• It is proposed as the central repository of information regarding corporate governance, human resources and financial management

• A PGPA rule will be developed which will detail the minimum corporate plan requirements

• Requirements will not be overly prescriptive

• Required from 31 August each year, starting in 2015.

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Annual Performance Statements - new PGPA Act requirement

• Annual performance statements are required to be produced at the end of each reporting period and a copy included in their annual report

• Annual performance statements will provide a clear line of sight to the performance information outlined in each entity’s PBS

• Requirement will commence from 2015-16 annual reports

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2. Scrutiny

The current framework• Non-financial performance information of Commonwealth entities

has been regularly criticized by the ANAO and Parliamentary committees for:

• no single source document

• difficulties assessing performance across related programmes

• Alignment issues between objectives, deliverables, targets and KPIs

• data used primarily for internal management purposes

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Proposed framework aims to deliver:

• improved guidance on KPIs and other measurement approaches

• clarity of options for improving data over time

• Improved alignment with other performance frameworks (e.g. National Partnership Agreements)

• options to leverage internal data to support strategic decision making

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3. System Design

Existing

• Performance reporting that applies to some entities

• Poor alignment of key performance documents

• Reliance of KPI’s as primary measurement tool

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Enhanced• Performance reporting that applies

to ALL entities

• Clear line of sight between performance documents

• A more flexible range of measurement tools

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Where to from here?

Legislating for performance is only a first step in cultural change. Systemic changes will be required to fully embed performance management across Commonwealth entities. September:

• Finance is seeking input by 29 September 2014 to allow integration into final proposed framework

October: • Draft Framework for dissemination and comment• JCPAA hearingsDecember: • Final Framework released• Guidance to be issued

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Consultation approach

Broad collaboration on the potential legislative, policy and guidance enhancements to the performance framework will occur in September.

This will include:• Senior executive workshops (Canberra and interstate)• Practitioner information sessions – EL and APS staff (Canberra)• Targeted consultations with key stakeholders and other

Commonwealth partners• Details about workshops and information sessions will be sent to

entities chief operating officers.

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QUESTIONS?

Contact DetailsPMRAperformanceframework@finance.gov.au

Brad CookAssistant SecretaryPerformance Reporting

and Planning BranchDepartment of Finance02 6215 2559brad.cook@finance.gov.au

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Resource Management

eLearning tools

www.finance.gov.au/resource-management/training/